Embracing good governance to bring purpose to life

Can you tell us about the establishment of an ethics-based organisational culture at Nedbank?

At Nedbank we have worked hard to entrench ethical practices and behaviour so that they may be effectively embedded across all functions and activities of the bank. The board’s role is to establish the tone at the top, and the group has implemented a comprehensive governance structure that is aimed at giving effect to the responsibilities of the board concerning ethics.

Besides signing the annual Board Ethics Statement, whereby the board (individually and collectively) commits to conducting itself with the highest standards of integrity, the board, through its Transformation Social and Ethics Committee (GTSEC), also provides leadership and strategic guidance on how ethics should be addressed across the organisation. It does this by, among other things, conducting a review and approving the Employee Code of Ethics and Conduct annually and providing oversight of the adoption and annual review of all ethics-related policies, as well as communicating these policies to employees. 

The board has delegated the management of ethics and human rights to the Group Ethics Office and provides oversight and guidance on all ethics initiatives implemented across the group, which include implementing ethics-related policies; training and awareness initiatives; conducting ethics investigations; and applying other measures designed to promote an ethical culture. Additionally, the board ensures that periodic independent ethics risk assessments are conducted for the group every three to four years and provides strategic guidance and oversight of the implementation of the ethics management plan, which is developed to address the outcomes of these assessments. 

GTSEC receives reports from the Group Ethics Office, which cover the state of ethics and human rights in the business. The report recognises that being ethical goes beyond legal and regulatory compliance. It monitors all ethical requirements in terms of the Companies Act, Banks Act, regulations, supervisory requirements as well as all other requirements in terms of the Nedbank Code of Ethics and Conduct, and related policies. 

Does good governance of the banks cascade out in society?

Yes, indeed, it is an interdependent relationship in which the banks play a central role in driving sustainable socioeconomic development for the benefit of all stakeholders, be they clients, their families, employees or society at large. This means that for our business to succeed we need a thriving economy, a well-functioning society and a healthy environment. We also recognise that sustainability issues, such as climate change, inequality and social justice, are playing an increasingly material role in shaping this system.

In this context Nedbank continually engages with shareholders on strategy, sustainability and environmental, social and governance (ESG) matters. This enables our board to exercise constructive influence, as and when appropriate, receive valuable feedback and protect the interests of our minority shareholders, while retaining top-tier ESG ratings.

How has Nedbank ensured that the organisation is, and is seen to be, a responsible corporate citizen?

The group’s strategy supports our vision of being Africa’s most admired financial services provider, with a clear driving purpose to use our financial expertise to do good for individuals, families, businesses and society. We recognise that we are an integral part of the communities in which we operate, and that businesses have a responsibility to contribute positively towards the social, economic and environmental development of these communities. 

The group strategy is purpose-led and values-based and it considers the needs and expectations of our stakeholders. We develop strategies that support the board’s strategic outcomes, and also support our fulfilment on our purpose and corporate citizenship status. Across the various divisions of the group, ongoing monitoring of the strategy against implementation is measured to ensure that we are achieving the targets that are set and agreed to. 

What risks are top of mind from a governance perspective?

World-class banking practices require robust institutional governance and risk frameworks to ensure our banking services remain secure and stable. We review these practices and frameworks on an ongoing basis, being mindful of the dynamic landscape in which we operate, and the health and economic changes, cultural shifts in the workplace, digital trends (such as artificial intelligence, geopolitics, and enhanced data safety and security requirements), and climate change risks that can impact on these. Banks are expected to adapt to regulatory changes quickly, which means that we must entrench good governance practices while retaining the flexibility to respond proactively to the fast-changing regulatory environment. However, governance within Nedbank entails far more than legislative compliance and best-practice principles.